30 Apr 2018

Sajid Javid and the Customs Union

Theresa May has appointed a new member to the Brexit Cabinet Committee just two days before what could be one of its most decisive meetings. The Committee was “as split down the middle as I’ve ever known it,” one member of the group told me.

Sajid Javid could be the vote that tips it away from Theresa May’s position.

The Brexit Committee was due to discuss Mrs May’s preferred option of a “partnership” plan for the future customs relationship which would mean the UK collects EU tariffs as trade comes into the UK and refunds suppliers if their products end up staying put in the UK. Brexiteers fear it might be completely unworkable and even if it was workable would not be achieved until after the next general election in 2022. That, the logic runs, is way too late to tie up arrangements and, depending on who you talk to, risks (a) Tory civil war and a boost to UKIP and/or (b) a dangerously open door to the current customs union relationship carrying on in perpetuity as the EU and the UK quibble about the workability of the new approach.

In the run-up to the Wednesday Cabinet Committee, members of the committee are getting individual briefings from the HMRC. Mr Javid may have to squeeze in his briefing between a lot of other business as he takes over Amber Rudd’s troubled department.

Soundings suggest that those supporting Theresa May’s position are: Greg Clark, Philip Hammond, Karen Bradley and David Lidington (though one Whitehall source thought the Brexiteers had made a bit of progress in peeling Mr Lidington off from the Remain camp on this issue). With Amber Rudd, that side could’ve numbered five. On the other side of the argument: David Davis, Liam Fox, Boris Johnson, Michael Gove and Gavin Williamson.  Under the old balance of power before the change in Home Secretary that was 5-5 with the PM having the casting vote. Those familiar with Sajid Javid’s thinking aren’t at all sure that balance now stays the same.

“He’s like Gavin (Williamson),” one MP said, “a born again Brexiteer.” Actually, Mr Javid’s support for the Remain side in 2016 surprised many friends who’d chatted to him over the years and was at odds with his consistent Eurosceptic positions of the past. Mr Javid, back then, said he was genuinely worried about the economic impact of Brexit (critics said he was tacking to keep in with the then mighty George Osborne). Since the referendum, he has spoken of the need to deliver Brexit properly and the need to leave the Customs Union. Did Mrs May check out Mr Javid on the Customs Union before appointing him? Did she raise it in the chat as she appointed him to the position? Hard to imagine that it wasn’t on her mind but might it be clunking and risky to raise the matter. Mr Javid might look at Amber Rudd’s time at the Home Office and decide that the best path is to carve out your own strategy and not lean in to the PM too much whether it is on Home Office policy or anything else.

It could be that this week’s Cabinet Committee is not decisive and the moment of truth comes later. One Whitehall aide said: “Every meeting (of the Brexit Cabinet Committee) is about avoiding the issue … they (No. 10 and senior officials) are on a mission to push everything down the pipe in the hope that something else turns up.”

The Max Fac (or “maximum facilitation” option) which the Brexiteer Cabinet Committee members are rallying around, also has a time lag on it. It offers technological solutions to the customs issue but it’s not clear when it could be ready to be rolled out. The EU is sceptical of the practicality of both options and thinks the technology won’t be up to the job of monitoring what would be an open, unguarded door into the EU’s market. It’s UK supporters say it could be ready on or around the date of the end of the transition but before the next election and that it only involves turning a blind eye to a few small traders crossing the Northern Ireland border which don’t really pose a threat to the integrity of the whole EU.

Brexiteers say the government can’t have two solutions on offer this late in the Brexit process and needs to come in behind one of them.
“Everything we know about (Theresa May) tells you she’ll just keep trying to put this off forever,” one minister said. Sajid Javid joins this intense and important argument in a finely balanced committee at a critical moment.

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